China Fabless: VeriSilicon touts shift to design lite

Editor’s note: Over the next several months, EE Times will profile China’s emerging fabless chip companies, examining their roots, business models and future prospects. Our series serves as background for the EE Times China Fabless Summit, which will convene in Spring 2013 in Silicon Valley. Our profile of VeriSilicon is the first in the series.

SHANGHAI – If you think chip companies are popping up everywhere in China, producing a flood of me-too products based on me-too business models, well, think again. VeriSilicon doesn’t fit the stereotype and defies many preconceived notions about Chinese technology companies.

Headed by Wayne Dai, one of the best connected executives in China and Silicon Valley, VeriSilicon is pitching a “design lite” strategy to potential global partners. Just as the wafer-foundry business model freed many IC companies from manufacturing internally designed chips using their own fabs, Dai promotes a “design foundry” business model. The model aims to free chip vendors from designing all elements of a customer’s SoC from scratch.

[Get ready for the
China Fabless Summit 2013, our Spring forum where Chinese startups will showcase their plans for the future of the electronics industry.]

A new breed of fabless, designless chip companies may not sit well with traditional vendors, but the design lite model may nevertheless be just what the doctor ordered for an industry in transition.

In essence, VeriSilicon offers an antidote to the costly custom consumer SoC business. The nature of the high risk, low margin custom SoC business has brought companies like Renesas Electronics to its knees. Renesas has little choice but to leave the audio visual/multimedia sector of the SoC business. Noting the tremendous pressure from competitors in Taiwan and Korea, VeriSilicon’s Dai said: “It’s time for Japan to work with the Chinese.”

While its design foundry approach mirrors eSilicon and OpenSilicon, VeriSilicon is counting on an army of talented, young Chinese engineers to flesh out the model. In a recent interview, Dai claimed that VeriSilicon has already become “the most geographically diversified design foundry.”

Based both in the U.S. and China, VeriSilicon employs a total of 380 people, 250 of them working in a spacious, sun-filled Shanghai office.

Born in Shanghai, Dai immigrated with his family to California. His siblings include sister Weili Dai, who co-founded Marvell Technology, and brother Wei-Jin Dai, president and CEO of Vivante Corp., a designer of GPU technology for the mobile device and home entertainment markets.

The concept of Design-lite services exist for many years and used by the the major companies in the US.
One vendor that explains this model in a nice video is OpenSilicon CEO: http://www.youtube.com/watch?v=aEDZV_yoAFg